The Commissioner of Income Tax vs Mahindra Spicers Ltd.

This Reference at the instance of the Revenue arises out of the Income Tax Appellate Tribunal''s order in Income Tax Appeal No. 5698 /Bom/1984 decided on 9th December, 1987. The assessment year is 1978-79. At the instance of the Revenue, the Tribunal has referred the following question of law for opinion of this Court:

"Whether on the facts and in the circumstances of the case, the Tribunal was right in law in allowing full initial contribution to the Superannuation Fund, whereas 20% of the same was to be disallowed and the remaining was to be disallowed and the remaining was to be allowed in five yearly equal instalments beginning with the assessment year relating to the previous year in which the amount was actually paid.?"

It arose from a deduction claimed by the assessee in the sum of Rs. 2,73,814 on account of initial contribution to the superannuation fund as deduction from the total income. In view of the Board''s Notification, the Income-tax Officer disallowed 20% of such initial contribution and further held that balance 80% would be allowed in five equal instalments in five assessment years. The Order of the Income-tax Officer was challenged before the Commissioner of Income Tax (Appeals) who relied on the decision in the case of Mahindra and Mahindra Limited v. CIT for assessment year 1972-73 and upheld the claim of the assessee. That view was confirmed in appeal by the Tribunal.

We are of the view that the question of law which has been referred is similar to the case of Mahindra and Mahindra Limited v. CIT.

When this Reference was taken up for hearing, parties conceded that in the case of Mahindra and Mahindra Ltd. Vs. Commissioner of Income Tax, (2003) 182 CTR 34 : (2003) 261 ITR 501 : (2003) 128 TAXMAN 394 , similar question arose and relying on the judgment of the Hon''ble Supreme Court in the case of Commissioner of Income Tax Vs. Sirpur Paper Mills, AIR 1999 SC 1264 : (1999) 237 ITR 41 : (1999) 2 JT 328 : (1999) 2 SCALE 168 : (1999) 2 SCALE 160 : (1999) 3 SCC 596 : (1999) 2 SCR 10 : (1999) AIRSCW 948 : (1999) 3 Supreme 97 , this Court held that the Notification issued by the Central Board of Direct Taxes cannot curtail the scope of deduction granted by the Act. Therefore, the questions were answered in favour of the assessee and against the Revenue.

Mr. Jasani has relied upon a further judgment and in the case of The Commissioner of Income Tax Vs. Mahindra and Mahindra Ltd., (2006) 200 CTR 28 : (2006) 284 ITR 679 which was delivered in relation to assessment year 1977-78 by a Division Bench of this Court. They followed the view taken in the case of Mahindra and Mahindra Ltd. v. CIT referred above.

In view of the authoritative pronouncement and of this Court as noted in paragraph 2 of this judgment and on questions 1 and 2 which are identically worded, we proceed to dispose of this Reference.

The question of law is answered in favour of the assessee and against the Revenue.

We would highly appreciate if out of the 1500 References approximately pending in this Court and from 1995, the parties intimate to the Registry despite any office objections being complied with or otherwise, that the questions referred by the Tribunal may be at either parties instance, have indeed been taken up as questions of law and already answered by the Court. They have been already answered by either this Court or by the Hon''ble Supreme Court of India. There could be situations where legal provisions based on which questions have been referred for opinion of this Court have undergone drastic changes or have been deleted completely. In all these eventualities, we would be spared answering the questions in individual References after they are called out serially. If such an exercise as is expected from the parties is undertaken and the Registry is reported the number of matters and cases from this list of 1500 References and which are covered one way or the other, we would immediately take them up and dispose them off accordingly. We would expect parties to take this trouble and labour and inform and intimate the Registry. At the first instance, this may be done in the case of 100 matters which were listed for directions on 9th April, 2015 and today. We would then take up the References for disposal either on 23rd April, 2015 or on 30th April, 2015. We would also expect that the remaining cases are notified for directions on 7th May, 2015. In other words, References other than those listed on 9th April, 2015 and today shall be listed for directions on 7th May, 2015.